Renewables to eclipse coal

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So now it looks like solar and wind technologies will be among the cheapest ways to make electricity by 2030. That’s the finding of a new Australian Energy Technology Assessment from Australia’s Bureau of Resources and Energy Economics, prepared by engineering firm Worley Parsons. But the report also opens the door for nuclear power.

Haven't seen the coverage in the mainstream newsmedia amongst all the Olympic buzz? You can read news coverage of the report here here, here, and here.

The bottom line is that large and more efficient wind turbines will help reduce costs for wind generators. Furthermore, cheap Chinese wind turbines exported to Australia will be a boost for wind farms. The important thing to remember is that generators relying on the wind have low maintenance costs. And in any case, most of these installations are new which means they are no way near end of life. As a result, there would be no depreciation problems that give accountants heart burn. According to the experts, the LCOE (otherwise known as levelised cost of electricity) comes out to $93. The LCOE produced by landfill gas is $93.

Then there’s brown coal. Now, brown coal is cheaper than wind with an LCOE of $92. But there’s a catch – the carbon tax drives the price up. With the tax and projected future carbon prices factored in, brown coal will cost $157. That’s the idea of having a carbon price – all forms of coal and fossil fuel generation will rise.
Now there is one finding in the report that will make people sit up. Nuclear energy will still be the cheapest source of power, cheaper than wind and solar, under a carbon price. Mind you, that does not include disposal and storage of spent fuel or provision for the decommissioning of plant. That would blow out costs significantly. Which may not make it that economically feasible. Still, it’s an option.

“Among the non-renewable technologies, nuclear and combined cycle gas (and in later years combined with carbon capture and storage) offer the lowest LCOE over most of the projection period and remain cost competitive with renewable technologies out to 2050,’’ the report says.

Writing in The Conversation, Andrew Blakers, the director for the Centre for Sustainable Energy, and Kenneth Baldwin, the director of the Energy Change Institute at the Australian National University, say we have to look at all the options.

“This is important, as the challenge of climate change – to limit CO2 levels below 450 parts per million to keep temperature rises to two degrees centigrade – will require all the tools at our disposal. Ignoring or removing any one of them – including nuclear power – would be like fighting this challenge with one hand tied behind our back.”

It’s certainly something that’s likely to generate much debate in the environmental movement.